If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total stockholders' equity was a $200,000 increase. True False

Question

Business

Melany Simpson

13 September, 15:44

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total stockholders' equity was a $200,000 increase. True False

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Answers (1)

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Phoenix Mullins · Answer 1

True

Explanation:

In the balance sheet, the assets, liabilities, and stockholder equity is recorded. In this the accounting equation is used which is shown below:

Total assets = Total liabilities + Stockholder equity

In the given question, the total stockholder equity would be

$190,000 = - $10,000 + stockholder equity

So, the stockholder equity would be

= $190,000 + $10,000

= $200,000

The debit and credit side of the balance sheet should always be equal and balanced.

Hence, the given statement is true